Ministry revamping employment laws to close loopholes and include home-workers

The Ministry for Equality is working on a revamp of the Employment and Industrial Relations Act (EIRA) and its subsidiary legislation, after ascertaining that the current laws do not reflect today’s realities.

This comes after an investigation by the Department of Industrial and Employment Relations (DIER) into the employment of home-workers who are paid significantly below the minimum wage through sub-contractors hired by Playmobil, found that this form of work does not fall under the EIRA and its subsidiary legislation due to the diverse nature of operations of the different sub-contractors and the highly flexible nature of how the home-workers work.

It has been ruled that home-workers are essentially self-employed and are at liberty to refuse the rates being offered to them.

“DIER considers this case closed but will continue its monitoring,” a spokesperson from the Ministry for Equality told The Malta Independent on Sunday.

This newsroom was also informed that home-workers will now be included within the EIRA.

Asked how DIER had reached its decision, the spokesperson referred this newsroom to regulation 3(2) of the National Standard Order, which stipulates that in order for a type of self-employment to be considered as an employment, five out of eight of the criteria listed have to be present.

The DIER found that home-workers only applied to two, which is correct, but it appears that home-workers are unable to satisfy the necessary criteria due a lacuna in the law due to lack of definition when it comes to tri-partite agreements.

Currently, Playmobil enters into an agreement with a sub-contractor and the sub-contractor enters into an agreement with the individuals who carry out the work – hence a tri-partite agreement.

Unfortunately, the Employment Status National Order does not refer to a tri-partite situation, but situations whereby one person renders a service to another – a bi-partite situation – and is therefore tested according to this criteria.

This shows a significant loophole in the law, as critics can argue that the test should not really be applicable to the situation with regard to Playmobil and the home-workers.

The DIER investigation was initiated followingquestions raised by this newspaper last May into home-workers employed by Playmobil in Malta, after statements made by Arnold Cassola during a university debate.

This newsroom revealed that the German company engages subcontractors, who then employ Maltese people to assemble toys, paying them between €1.90 and €2.00 per hour to work from home – less than half the minimum wage.

It was also found that the company requires subcontractors to adhere to strict production regulations. Documents indicate that in respect of one product, the sub-contractor will be paid €11.40 for every 1,000 pieces that are produced in three hours, or one piece every ten seconds.

An investigation was then opened by the Department of Industrial and Employee Relations (DIER) where it transpired that the conditions of employment of the employees engaged with the subcontractors of Playmobil were in line with the Employment and Industrial Relations Act and its subsidiary legislation. An investigation into the home workers was then opened.

The Social Security Act was also amended to support home-workers after it was revealed by this newsroom that a home-worker had been struck off the social benefits register.

However, while the government’s initiative should be acknowledged, it must be said that this is essentially supplementing an exploitative system through the use of allowances.

What are the criteria that make a person an employee?

(a) An employee depends on one single person for whom the service is provided for at least 75 per cent of his income over a period of one year;

(b) an employee depends on the person for whom the service is provided to determine what work is to be done and where and how that work is to be carried out;

(c) an employee performs the work using equipment, tools or materials provided by the person for whom the service is provided;

(d) an employee is subject to a working time schedule or minimum work periods established by the person for whom the service is provided;

(e) he cannot sub-contract his work to other individuals;

(f) an employee is integrated in the structure of the production process, the work organisation or the company’s or other organisation’s hierarchy;

(g) the employee’s activity is a core element in the organisation and pursuit of the objectives of the person for whom the service is provided; and

(h) the employee carries out similar tasks to existing employees or, when work is outsourced, he performs tasks similar to those formerly undertaken by employees.